Traditions Bank - 2021 Annual Highlights

LETTER FROM THE CHAIRMAN AND PRESIDENT & CEO

A true community bank builds real and lasting relationships, makes decisions locally, puts its customers' interests first, and invests its resources in the causes that matter to the people it serves. In other words, it makes it their mission to help others succeed. Nearly two decades ago, Traditions Bank opened its doors to be just that—a true community bank. A financial institution that truly cared about people and community. A bank that filled a void.

Michael E. Kochenour Founder & Chairman of the Board

Eugene J. Draganosky President & CEO

Today, as we reflect on 19 years of service—and 16 consecutive years of profitability—it is with gratitude and a strong sense of purpose that we report another excellent year of achievements and financial performance for Traditions Bank. This past year has been one of the most forward-focused periods of our history, as we built upon an already solid foundation for ongoing profitable organic growth and expansion to build long-term shareholder value, sustain our independence, and continue to serve our communities for decades to come.

Perhaps the most memorable accomplishments of 2021 are the successful rebranding/ renaming of the bank, the formation of a holding company, and our extension into Lancaster and the Capital Region—all while confronting the ongoing challenges of the pandemic head-on to keep our associates and customers safe.

OUR REBRAND

We’ve been building out our new rebrand with internal and external communications that promote the bank’s mission to have a meaningful impact on our customers and communities— and each other. With a new and updated look, a unified message, and a compelling brand story that speaks to our sole purpose of helping friends and neighbors succeed, Traditions Bank is positioned to bring our unique style of community banking to new markets.

HOLDING COMPANY STRUCTURE

The bank completed its reorganization into a holding company structure effective May 1, 2021. The bank is now a wholly-owned subsidiary of Traditions Bancorp, Inc., a Pennsylvania corporation formed by the bank. The company’s common stock now trades on OTC Pink under the symbol TRBK. This holding company structure has been adopted to provide greater future flexibility in terms of capital formation and the creation of new business lines—and it will facilitate the organization’s ability to fund our continued growth and efficiently manage our capital.

EXPANSION INTO NEW MARKETS

Since April 2021, we’ve been successfully helping to serve businesses and individual clients from our 3,600-square-foot Lancaster market headquarters at 1687 Oregon Pike. Additionally, we have recruited new relationship sales associates to supplement our loan production office in Lemoyne and expand our presence in the Capital Region. In their first nine months, these teams exceeded expectations for commercial loan growth, residential mortgage production, and deposit generation.

PERFORMANCE

Traditions Bancorp, Inc. reported net income for 2021 of $8.2 million compared to $8.4 million the prior year. On a per share basis, the company reported $2.67 earnings per share (diluted) in 2021 compared to $2.66 per share in 2020. The book value per common share was $22.87 on December 31, 2021 versus $20.72 as of December 31, 2020.

Net interest income increased $1.5 million, or 7%, driven by loan growth, lower cost of funds, and PPP fee income recognition. Favorable credit quality supported a $4.2 million reduction in the provision for loan losses, consistent with broader industry trends. Gains on the sale of mortgages decreased $1.8 million, or 14%, from the remarkable 2020 results. Market conditions for the real estate industry were challenging in 2021—the supply of housing did not keep up with demand, and refinancing activity slowed due to rising interest rates—but the mortgage team expanded its territory and was responsible for nearly one-third of the bank's 2021 operating revenue.

FUTURE FOCUS

Over the years, we have witnessed the positive impact Traditions Bank has had on the people, businesses, and communities we serve. With a vision for the future—and a detailed strategic plan in place to support that vision—we’re taking aim at the many opportunities ahead. We’ve been building our team and putting in place the appropriate infrastructure to accommodate long-term growth and success. In 2021, we welcomed Dr. Roxanna L. Gapstur, President of Wellspan Health, to the Board of Directors. Thomas J. Sposito II assumed expanded strategic leadership responsibility as Chief Banking Officer and now oversees all incomegenerating divisions of the bank exclusive of mortgage. We also enhanced the breadth and depth of our executive management team with the promotion of three leaders: Joseph D. Lombardi as Chief Technology Officer, Justin M. Mann as Managing Director/Treasurer, and Suzanne M. Becker as Executive Administrative Officer/Assistant Corporate Secretary.

SUPPORT THROUGH THE PANDEMIC

We would be remiss if we did not recognize that we are all still fighting the good fight against the pandemic. Although it has been challenging, our team has continued to move forward and make our mark through unrelenting commitment and tireless dedication, rallying together to be there for each other and our customers. We’ve stayed true to our core values, whether we served customers in person, online, at the drive-thru, or with a phone call. Ensuring everyone’s health and safety—while being flexible, creative and supportive—is all part of providing exquisite experiences and building real relationships.

EQUITY & INCLUSION

We advanced our Diversity, Equity, and Inclusion focus by completing, approving, and rolling out the bank’s diversity statement, policy, and strategic plan. We instituted Implicit Bias Training to help us understand our own unconscious patterns of thinking in an effort to eliminate discriminatory behaviors. Recognized for our commitment to support associate diversity and advance shared prosperity, we were named as a Welcoming Workplace by the York County Economic Alliance. Additionally, our Her Traditions scholarship program was expanded to match our focus on supporting women across all industries and life stages.

COMMUNITY COMMITMENT

We successfully implemented Round 2 of the Paycheck Protection Program (PPP), generating an additional $19.3 million in loans and orchestrating the forgiveness of nearly $41 million during 2021. Our customers are our friends and neighbors, and we will always be there for them. To that end, Traditions Bank associates tracked 2,671 volunteer hours with local community organizations. The bank donated $338,545 to 139 nonprofits across Central PA. In addition, we advanced philanthropic and volunteer support for our communities, including the implementation of a Volunteer Time Off (VTO) Policy and the 19 Days of Giving program to celebrate our 19th anniversary. We were once again acknowledged by York Newspaper Company as one of the Best Banks of York County, and took home Central Penn Business Journal’s top Reader Ranking honors for Best Bank for Business, Best Bank for Personal, and Best Mortgage Lender for the third year.

Throughout the evolutionary year of 2021, the bank’s commitment to our core values remained resolute. Our mission is “to have a meaningful impact on our customers, our community, and each other. As an independent bank, this is how we make our mark and better the world around us.” We wish to express our sincere gratitude for the steadfast support of our stakeholders. Thank you for allowing us to carry out our mission with the same passion today as when we first opened our doors almost 20 years ago.

Michael E. Kochenour

Eugene J. Draganosky Founder & Chairman of the Board President & CEO

BOARD OF DIRECTORS

TRADITIONS

(seated left to right)

William J. Shorb - VP & CFO, HOLLA Spirits, LLC | Elizabeth F. Carson - Retired Banking Executive, Community Leader | Michael E. KochenourFounder & Chairman of the Board, Traditions Bank | Eugene J. Draganosky - President & CEO, Traditions Bank | Wanda D. Filer, M.D. - Chief Medical Officer, VaxCare

(standing left to right)

David L. Bode, CCIM, SIOR - Managing Partner, ROCK Commercial Real Estate, LLC | Roxanna L. Gapstur, PhD RN - President & CEO, Wellspan Health | John D. Brown - Consultant, Financial Investor | R. Eric Menzer - President, York Professional Baseball | Kevin J. Schreiber - President & CEO, York County Economic Alliance | Robert F. Lambert - President, York County Libraries | John M. Polli - President, Reliance Student Transportation, LLC

BANCORP, INC. AND TRADITIONS BANK

Traditions Bank is committed to remaining a thriving, independent organization, delivering value to our shareholders, and realizing our vision to be the true local bank of choice across our markets.

FOR FURTHER DETAIL, REFER TO THE 2021 ANNUAL REPORT OR VISIT IR.TRADITIONS.BANK

EXECUTIVE MANAGEMENT TEAM

Eugene J. Draganosky President & CEO

Patricia A. Martin Managing Director, HR & Organization Development

Bradley A. Willow Managing Director, Personal & Private Banking

Thomas J. Sposito II Chief Banking Officer

Justin M. Mann Managing Director, Treasurer

J. Mark Poliski Chief Credit Officer

John D. Blecher, CPA Founder, CFO & COO

Suzanne M. Becker Executive Administrative Officer / Assistant Corporate Secretary

Michael E. Huson Managing Director, Business Services

Teresa L. Gregory, DBA President, Traditions Mortgage

Joseph D. Lombardi Chief Technology Officer

STRATEGIC LEADERSHIP TEAM

Hans C. Abendschoen Director of Retail Sales & Service

Kathleen L. Brown Director of Mortgage Sales

Susan M. Campbell Director of Training & Development

Bonnie Gyenes Director of Accounting

Nicole Shaffer Director of Her Traditions

Glenn White Director of Marketing

Elizabeth Dellinger Director of Treasury Management

Kristi Riley-Platt Director of Mortgage Operations

Keith Sheffer Director of Loan Administration

GROWING FOR THE FUTURE

The year 2021 saw Traditions Bank and our associates continue to rise to new challenges, while also embracing the many opportunities before us. We’re focused forward, determined to help our communities grow and succeed. The unique banking culture we’ve created puts the needs of neighbors first and is dedicated to providing solutions and experiences that nurture prosperity.

There’s a need for what we offer—and how we offer it, from the relationships we build to the decisions we make in the best interest of our customers. This is where traditional values meet innovative solutions. Where neighbors and local businesses are made to feel special and supported—because they are. We’re truly committed to making a difference. The preservation of our culture of caring requires a bank-wide effort, and every associate should be proud of their contributions.

As we move into 2022, we are entering from a position of strength due to the increased demands for business loans across our footprint, supplemented by new opportunities created through our geographic expansion. Our balance sheet is also well positioned to respond to any future upward change in interest rates.

The strong foundation we’ve established has prepared us for a greater capacity to serve, which means giving back even more to the communities that have embraced our vision. We’re excited for the future and for the privilege of being able to help more people and businesses make their mark on the world.

REAL RELATIONSHIPS EXQUISITE EXPERIENCES STRONG PERFORMANCE PERSONAL GROWTH EQUITY & INCLUSION COMMUNITY COMMITMENT TRUE

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS:

This release contains forward-looking statements about Traditions Bancorp, Inc. that are intended to be covered by the safe harbor for forward-looking statements provided by the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” “anticipate” or similar terminology. Such forward-looking statements include, but are not limited to, discussions of strategy, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives, goals, expectations or consequences; and statements about future performance, operations, products and services of Traditions Bancorp. Traditions Bancorp cautions readers not to place undue reliance on forward-looking statements and to consider possible events or factors that could cause results or performance to materially differ from those expressed in the forward-looking statements, including, but not limited to: ineffectiveness of the organization’s business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; and deteriorating economic conditions. Forward-looking statements in this release speak only as of the date of this release and Traditions Bancorp makes no commitment to review or update such statements to reflect changes that occur after the date the forward-looking statement was made.